A pooled flood insurance fund would benefit Cork – says broker

insuremyhouse.ie and insuremyshop.ie are calling on the Government, for a second time, to establish of a Flood Fund similar to the Motor Fund run by the Motor Insurance Bureau (MIBI). The financial experts say that if 1% of the 5% levy already charged to insurers was directed towards a fund with a sole purpose of dealing with flood losses, then, at the very least, affected businesses and homes could take some comfort in the fact that they would have a financial cushion to fall back on – to some degree.

Devastation for businesses in Bandon flooding tonight. 2nd such event in 6 years and no Insurance cover. pic.twitter.com/5zj8iuAbVF

Jonathan Hehir, MD of insuremyhouse.ie and insuremyshop.ie explained, “At the beginning of 2014 we called for this fund to be set up. If the Government had taken the required action at the time and put it in place, then the fund would now be worth an estimated €26 Million and this money could be used to address the serious damage that floods are currently wreaking on homes and business in certain areas of the country.

But it wasn’t. And now we find ourselves in the same predicament we found ourselves in several years back – with the same home and business owners being thrown into disarray because the necessary flood precautions were not put in place and now they are facing a Christmas of worry and financial heartache.

We can’t keep letting this happen to the same people. We need action now. A flood fund can still be established. We are certainly not suggesting an increase in premiums, but instead that just 1% of the hefty 5% insurance levy is redirected to a special purpose fund. This could be managed in the same way as the MIBI fund, which specifically addresses those losses incurred by drivers but not covered by individual motor insurance policies. A new Flood Fund would have a dual purpose of funding flood defences and assisting affected homes and businesses going forward”.

The insurance experts contend that standard insurance policies are expected to cover losses where there is an outside possibility that a loss may occur. Where that possibility becomes almost a certainty, then a different type of compensation arrangement needs to be established.

Jonathan concluded, “Insurance is based on the principle where a group of people pool their resources to fund the losses of an unfortunate few. The same principle applies to central taxation where a proportion of the wealth of many is transferred to those less well-off – so the Government simply cannot wash its hands in this case and say that there is no precedent for assisting those with flooded homes and businesses”.

The constituency office of West Cork Government TD Jim Daly was one of the many affected by floods in Bandon, Co Cork in December 2015